By Arvind PanagariyaEven from the limited details that Prime Minister Narendra Modi spelt out in his speech on Tuesday evening on the Rs 20 trillion stimulus package, it was clear that this headline figure would be reached by adding apples and oranges. The details now provided by finance minister Nirmala Sitharaman on Wednesday make this explicit. Not all of the Rs 20 trillion constitute extra fiscal expenditure. They include extra expenditures, loans, loan guarantees and other forms of commitments by the government and the Reserve Bank of India (RBI). This is just as well. The medium to long-term impact of adding 10 percentage points to fiscal deficit would not have been pretty. The government would have had to print massive sums of money raising cash in circulation by a very large percentage — perhaps as much as 25-30%. How much impact the package will have on fiscal deficit is anybody’s guess. There are far too many unknowns. We do not
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